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Wall Street: Linux Gets a Lift from Web Services, Tech Support

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Are Linux and open source implementations rising on Wall Street? “Yes,” said participants in a financial services IT trade show held this week in New York City, who cited Web services and incremental improvements to tech support as two big drivers.

Beyond deploying Terracotta’s Web services solution with Red Hat Linux servers, for example, major investment bank Goldman Sachs now heads an investment group that is pouring $13.5 million into the software start-up, said David Campbell, vice president of Goldman Sachs’ principal investment area.

Meanwhile, Terracotta’s caching and clustering services are currently in use by at least four other financial services firms, according to Terracotta CEO and Founder Ari Zilka, another speaker at this week’s “2006 Web Services/SOA on Wall Street” conference.

Terracotta’s solution operates on all Java platforms. “But all (of these) financial firms are running Terracotta with Linux,” Zilka noted, during an interview at the show with LinuxPlanet.

Wall Street started to explore Linux during the financial slowdown of 2001, Campbell told attendees during his turn at the conference podium.

Most of the early Linux deployments involved custom applications, since commercial applications were initially impeded by inadequate tech support, Campbell said later. But tech support for Linux has shown substantial progress over the past few years, he told LinuxPlanet.

“Red Hat kicked it all off,” Campbell said. And at this point, more commercial vendors are now offering both software products and related tech support for Linux.

Novell has also gotten into the Linux tech support act, following to its acquisition of SUSE Linux, said Hans Zaunere, president of New York PNP, during another interview with LinuxPlanet.

“Novell is now offering and supporting everything from a desktop environment to remote management on Linux,” he elaborated.

Moreover, newer Linux/open source players such as SpikeSource and SourceLabs are now doing what Red Hat started to do much earlier–“bringing together Linux components with tech support and other services,” he said.

Other showgoers cited consulting arms operated by giants such as BearingPoint and IBM as entrants into the Linux tech support category on Wall Street.

But a number of smaller consultants are getting work from Wall Street, too. Either way, banks and brokerage firms gain access to “a single throat to choke” in case a deployment goes wrong, according to Zaunere.

At the same time, emerging Web services offerings are also helping the cause of Linux, contended others at the conference, which was put on by Lighthouse Partners at a hotel in Manhattan.

Beyond tighter integration between Linux and other environments, attendees talked up the ability to use Web services for migrating high-end software from costly multiprocessor servers to lower-end PC hardware.

“Web services and ‘open source’ are each bringing down the cost of software. Software is becoming a commodity, just as hardware long has been,” said Joe McKendrick, an industry analyst.

Terracotta’s Web services solution provides much more scalability than the bank’s previous homegrown clustering solution, according to Vladimir Zakharov of Goldman Sachs.

“And we definitely want to be in the commodity space for hardware,” Zakharov observed.

On the other hand, other showgoers saw plenty of room for improvement in Web services/SOA, mentioning barriers revolving around lingering product immaturity and complexity.

In one presentation, Skip Snow of Citigroup and Jake Sorofman of Systinet addressed issues surrounding governance, or how to handle the changes to applications that can be wrought by Web services.

In another, Steve Ross-Talbot, CTO of Hattrick Software, maintained that SOA is still only an “orientation,” as opposed to an “architecture,” since SOA still lacks a consistent and standardized messaging architecture.

“SOA is still without an ‘A,'” according to Ross-Talbot, who is also chair of Web Services Activity for the W3C industry standards group.

Moreover, in and of themselves, approaches such as Web services and open source will not solve a company’s IT and business problems, according to Ronald Schmelzer, a senior analyst for Zapthink LLC.

Instead, financial services firms and other companies need to plan deployments of these approaches in ways that will keep underlying objectives such as cost savings and ROI firmly in mind.

But products announced at the show indicated continuing progress on the Web services side, too. For instance, ASpeed Software announced that in version 3.5, its Accelerent software for parallelizing and distributing applications now supports Java and C# development environments, along with the previously supported Excel spreadsheet, C, C##, and VM tools.

Essentially, Accelerent makes changes to memory which allow SMP applications to run on grids of smaller computers, said Kurt Ziegler, executive VP of marketing and development for Aspeed, in another interview.

Financial services firms have already used Accelerent together with spreadsheets to move applications from Unix-based systems to Linux grids.

An edition of Accelerent for moving apps from larger parallel computers is due out in mid-2006.

Parasoft, on the other hand, rolled out a new edition of its automated test, analysis and development environment for SOA. Version 4.5 of SOAtest includes enhanced SOA development governance, broad test management support, and new automated testing of BPEL (Business Process Execution Language) and BPEL-based processes, said Wayne Ariola, VP of corporate development.

In addition to Goldman Sachs, three other companies are now investing in the Terracotta Web services start-up: Benchmark Partners, Accel Parners, and Presidio STX, a subsidiary of Sumitoro Corp. of Japan.

Under initial testing, Goldman Sachs worked with Terracotta 1.0, Zakharov said. The bank has now moved on to version 1.5. The numbers aren’t ready yet for 1.5.

“But 1.5 is (an improvement), and we know that a lot of our issues (around high performance requirements) have been addressed,” he said. Further on down the road, Terracotta expects to add support for partition caching.

This article was first published on LinuxPlanet.com.

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